ICSTIS customer refunds

ICSTIS consultation on "Statement on the provision of refunds to consumers and the development of industry best practice for customer service: a consultation paper"

Issued February 2, 2006

Introduction

BT welcomes the opportunity to comment on this consultation.

BT suggests that a much more radical approach is needed as we are concerned about Service Provider (SP) compliance with refund directions under the current proposals.  For example, a fund where SPs pay a set sum prior to commencing their service, which can be used for refunds as and when needed and administered centrally ensuring monies are readily available for customer refunds. BT believes that this type of scheme is possible as it is similar to the live services compensation scheme; it would ensure consumers are protected, refunded quickly and would improve confidence in the Premium Rate Services (PRS) industry.

Underpinning any approach is the need to ensure that non-compliance leads to enforcement action.

BT agrees with ICSTIS' comment in the consultation concerning the complexity of the value chain involved in the PRS industry.  There can be a number of different companies involved in PRS calls e.g. the Originating Communications Provider (OCP), the Terminating Communications Provider (TCP), a Service Provider (SP) and even an Information Provider (IP), all of whom participate in revenue share. 

An OCP retains only a very small portion of revenue.  For example on a £1.50 call an OCP could retain as little as 3p.  The remainder of the revenue is passed down the value chain. 

Furthermore the money passes quickly from the OCP through to the TCP and onward to the SP. This can all happen well in advance of the actual customer being billed. This means that by the time a customer complains to their telephone company about the charge, the company no longer holds the full value chain revenue with which to refund the full cost of the service.  The recent 30 day rule, where TCPs must not pass on revenue to SPs for 30 days, goes some way to slowing down the flow of money through the chain.  However this does not remove the problem entirely.

Whilst BT strongly believes that the obligation should fall on the SP to either provide the refund or fund it, as it is the SP who has provided the service and received the majority of the value chain money, in practice this will not always be possible. In fact, there could be at least three potential scenarios for refunds dependant on where the money stands in the value chain:

1. The SP, where the money has passed down the value chain and ICSTIS have made a formal direction.
2. Where the TCP is holding funds under the 30 day rule or where instructed to do so by ICSTIS.
3. Where the Artificial Inflation of Traffic (AIT) process means the OCP is withholding funds from the TCP (see question 3 for further detail).

BT thinks that the proposals outlined by ICSTIS are only suitable for the short-term.  BT reiterates the need for a more radical approach and suggests that industry and ICSTIS should work together to implement a central fund. BT's specific comments are detailed in the relevant sections of this document.

Download full response as a PDF document

BT would welcome any comments on its position as laid out in this document. Comments should be addressed to Nicola Robbins by email to nicola.robbins@bt.com